Citigroup (NYSE:C) Sees Cliffs' (NYSE:CLF) ArcelorMittal (NYSE:MT) Negotiations as No Risk to Earnings

Citigroup Inc. (NYSE:C) commented on Cliffs Natural Resources Inc.'s (NYSE:CLF) earnings today, targeting specifically the ongoing negotiations with ArcelorMittal (NYSE:MT).

Citigroup's Brian Yu wrote in a note that Citi sees negotiations between the companies "as a timing issue rather than an earnings risk."

Cliffs significantly missed on their third quarter operating earnings per share, which came in at $2.08, far below the $2.70 Citigroup was looking for. Earnings in general were reported at $2.18 a share.

Cliffs was trading at $64.24, up $0.87, or 1.37 percent as of 1:00 PM EDT.

Citigroup (NYSE:C) Maintains "Buy" on Cliffs Natural Resources (NYSE:CLF)

Citigroup (NYSE:C) reiterated a "Buy" on Cliffs Natural Resources (NYSE:CLF), while raising the earnings estimates of the company for 2010 and 2011.

Citigroup analyst Brian Yu said, "CLF continues to trade at a heavily discounted multiple of 5.9x on our 2011 estimate due to iron ore volatility, contracts in arbitration, and recent acquisitions. We see value and opportunity in the potential unwinding of compressed multiples."

Earning were raised because iron ore prices are expected to rise over the next couple of years.

Earnings per share for 2010 are $8.60 a share, while for 2011 they are estimated at $10.15 a share by Citigroup.

The financial institution also maintained its price target of $87 on Cliffs.

Cliffs was at $59.03 a share, dropping $1.19, or 1.98 percent.